The bond rating agencies have the alertness, brains and myopic attitudes of ostriches. How in the world can anyone downgrade B. of A. for making a highly opportunistic strategic purchase of Merrill Lynch, financed 100% by newly issued common stock, with no cash outlay. From a theoretical accounting standpoint issuing new common shares for real net assets, which Merrill Lynch definitely has, will strengthen, and not weaken a bank's balance sheet. But what do I know. I am only a CPA with prior experience working for banks. I only see the excellently crafted "little picture" and do not engage in "big think" panic reactions. I think I'll buy some B. of A. stock tomorrow.

4:54 pm September 17, 2008

NH wrote :

@ Paul Esch:
BofA stock price may well go up but that does not mean that it did not become more risky. Merrill has a bunch of valuable assets, but it also has liabilities which under certain conditions may come out to be even bigger-hence the downgrade.

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